Earlier this year, the U.S. Mint officially stopped producing new pennies, following a directive from President Trump to end the coin’s production due to its inefficiency — it costs nearly 4 cents to make a coin worth 1 cent. With billions of pennies still in circulation, the plan was to let existing coins last until mid-2026.
But that end has come much quicker than expected. According to the Federal Reserve, more than 110 of its 165 coin distribution locations have run out of pennies and are no longer fulfilling orders or accepting penny deposits. The Fed has published an FAQ outlining how it will manage remaining inventory and future orders, but the message is clear: the penny is disappearing faster than expected.
What Does This Mean for You?
If you handle cash transactions, you’ll soon start seeing prices rounded to the nearest nickel. The most common rounding method is:
- Round down: 1¢, 2¢, 6¢, and 7¢
- Round up: 3¢, 4¢, 8¢, and 9¢
Pending legislation may make this the national standard, but until then, businesses are choosing their own rounding methods. Some round up, some round down, and others follow the nearest-nickel rule.
It is also expected we will see the updating of point-of-sale (POS) and teller systems to handle rounding, but those updates have proven more complex than expected.
A Quick Note on Payments
👉 Only cash transactions will be rounded. Electronic payments — including cards, checks, and mobile apps — will still settle exactly to the penny.
Why It Matters
This shift might seem small, but it’s a powerful reminder of how even the tiniest parts of our financial system — like a 1¢ coin — can have outsized impacts. From pricing strategies to tech upgrades, the penny phase-out is reshaping how we think about cash, change, and everyday transactions.
Additional Resources
American Bankers Association Resources
Disclaimer: The information provided in this article is for general informational purposes only and should not be considered financial advice. Interest rates, terms, and conditions mentioned are illustrative and do not reflect actual rates offered by Community Bank. For detailed information and personalized advice tailored to your specific situation, please consult with a financial advisor.